Only for people who have been around for at least 2 recessions ! (Recession is coming!!!)

[21elnegocio]

Hello Mates,
I was here reading this article and also studying multimillionaires like Carlos Slim and many others. They made a tons of money in recessions, they bought business in recessions, and I was wondering what would I do if a recession was to happen in a couple of years or less. I sat there wondering what business would I start? What business would I buy? Would I buy real estate ? Stocks ? Gold, Silver ?


What would you buy ? Real estate ? Stocks? Oil ?

What business would you buy ?


Or what business would you start ?

What sells during a recession ?

In other words what would you do to multiply your money ? Why would you do that ?


You already know what I would do ! I would buy real estate, triplex, fourplex, and single family homes (Single family homes appreciate the fastest) I would obviously use loans to acquire as mush real estate as possible. I know a friend that made millions by buying a portfolio of homes when that market was at its lowest. He bought 95 homes, he sold some to invest into the ones that needed work so they can be rent-able. Now he is worth millions, lives off cashflow, dont get me wrong the guy still has issues all the time with the homes. He said I have 70 roofs, 70 ac's units to watch for, but it sure does cashflow !


According to the facts in the article below we would be entering a recession here soon
Great News: There’s Another Recession Coming

 

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[GuestUser450]

I think being in cash is more important than the vehicle. When people face the music, opportunities appear.

 

[RazorCut]

Moral issues aside when a recession hits people need money. Payday loan companies and Pawnbroking are two businesses that flourish during such times.

For me i think it would be property and land.

 

[MTF]

The problem with preparing for a recession is that even if it's coming "soon", you'll never time it. It might happen tomorrow, it might happen a year from now, or even three years from now.

A better question would be: what are you going to do today to multiply your money?

Money is made in all kinds of economic conditions. There are still undervalued stocks to buy, distressed real estate (or motivated sellers), etc. Waiting for a recession is like giving yourself a license to procrastinate.

 

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[Sanj Modha]

Sell lipstick or sell pizza. Both are recession proof and sales go up during downturns.

 

[Rickchise23]

I think it is important to note that you need to make some money now before you get to the recession, or setup a business that is poised to do well in a recession. I personally own a real estate company active in WA, AZ, NV and GA and we work specifically with bank owned properties and servicing these properties for the banks and getting them sold when they are foreclosed on. I had to expand to 3 more states to keep the business going well during this real estate boom, but when the house of cards falls, I will be exceptionally well positioned just as soon as the government decides to stop propping the market up with artificially low interest rates and pumping free money into circulation through the FED.

The real question is will you be able to keep your current income when this recession hits?

What if you can't get a loan to buy any property?

I agree that a recession is on the horizon at some point but the best way to be ready for a big recession is not to wait but rather to keep stacking all your chips everyday in anticipation of being able to buy when the market turns. Buying cash flowing rental property now is something that should also perform well in a recession. You have to be able to ride through the downturn and not need to sell it in the meantime however. Don't wait to buy that four plex because it really doesn't matter what price you bought the damn thing for as long as you don't ever plan to sell it. Buy a four plex that will pay for itself and then pay you income every month thereafter.

 

[Alexlewter]

Nominal government bonds, ideally a diversified portfolio of developed economies, with middling durations (7-10y), probably leveraged up for higher return levels (e.g., implemented via futures).

A recession is going to lead to central bank interest rate easing in order to spur growth. The mark-to-market value of the bonds will increase directly as a result of the lowered short rates.

Recessions are also typically disinflationary. As a result, the yield income on your portfolio will have somewhat increasing purchasing power, helping the total return on the bonds.

A diversified portfolio of global sovereigns will protect you against any idiosyncratic effects in a particular national credit. Assuming we're talking about a global recession, there will almost certainly be a correlated GDP drawdown in the developed world due to trade & market interlinkages, and those bonds will rally in unison. But it's better to buy across governments rather than put all your capital into a single market to get some diversification benefit.

 

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[Raoul Duke]

Cemeteries.

 

[jpanarra]

storage units... win/win... in recessions people sell their homes and need a place to put their things... in economic booms they buy too much and need to store things...

 

[CareCPA]

I think being in cash is more important than the vehicle. When people face the music, opportunities appear.

This.
Almost everything is on sale during a recession. Having capital that you can redeploy to acquire them is the most important.

Don't depend on lines of credit or refinancing existing assets - these may dry up during a recession as banks become more strict on lending requirements. On the other hand, current owners of businesses and real estate may become more open to the idea of owner-financing, which would allow you to acquire and then refinance once the economy improves to pay off the owner. This actually takes almost all risk off of "you" the buyer.

 

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[Runum]

Hello Mates,
I was here reading this article and also studying multimillionaires like Carlos Slim and many others. They made a tons of money in recessions, they bought business in recessions, and I was wondering what would I do if a recession was to happen in a couple of years or less. I sat there wondering what business would I start? What business would I buy? Would I buy real estate ? Stocks ? Gold, Silver ?


What would you buy ? Real estate ? Stocks? Oil ?

What business would you buy ?


Or what business would you start ?

What sells during a recession ?

In other words what would you do to multiply your money ? Why would you do that ?


You already know what I would do ! I would buy real estate, triplex, fourplex, and single family homes (Single family homes appreciate the fastest) I would obviously use loans to acquire as mush real estate as possible. I know a friend that made millions by buying a portfolio of homes when that market was at its lowest. He bought 95 homes, he sold some to invest into the ones that needed work so they can be rent-able. Now he is worth millions, lives off cashflow, dont get me wrong the guy still has issues all the time with the homes. He said I have 70 roofs, 70 ac's units to watch for, but it sure does cashflow !


According to the facts in the article below we would be entering a recession here soon
Great News: There’s Another Recession Coming

I have lived through many recessions. During the 2008 recession conventional real estate lending locked up. You may have gotten hard money or private lending. Cash is king. Also trust in appraisals and comps was all screwed up. In some markets it was tough to put a value on some properties.

In the recession around 1988, savings and loan crash, the government established the RTC and unloaded massive real estate blocks on the books for FSLIC. It was said that the properties were sold for 10 cents on the dollar. It was a time to buy but you had to be in position to buy in bulk.

REI can be a great buy during a down market, but not all real estate and not all markets. You still have to be able to do due diligence.

 

[G-Man]

What would you buy ? Real estate ? Stocks? Oil ?

Real Estate.

What business would you buy ?

Liquor store with check cashing and lotto.

What sells during a recession ?

Lotto tickets, booze, handguns.

 

[Envision]

storage units... win/win... in recessions people sell their homes and need a place to put their things... in economic booms they buy too much and need to store things...

bingo, I work for a holdings company and they literally bought 6 facilities during this time. When times get bad the valuation looks good for sellers.

 

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[MJ DeMarco]

A better question would be: what are you going to do today to multiply your money?

Amen. The next recession could be next week. Or it could be in the next decade. Prepping for it should not be occupying a lot of your mental energy.

Get your house in order. Try to operate debt-free, and have free cash.

 

[21elnegocio]

I think it is important to note that you need to make some money now before you get to the recession, or setup a business that is poised to do well in a recession. I personally own a real estate company active in WA, AZ, NV and GA and we work specifically with bank owned properties and servicing these properties for the banks and getting them sold when they are foreclosed on. I had to expand to 3 more states to keep the business going well during this real estate boom, but when the house of cards falls, I will be exceptionally well positioned just as soon as the government decides to stop propping the market up with artificially low interest rates and pumping free money into circulation through the FED.

The real question is will you be able to keep your current income when this recession hits?

What if you can't get a loan to buy any property?

I agree that a recession is on the horizon at some point but the best way to be ready for a big recession is not to wait but rather to keep stacking all your chips everyday in anticipation of being able to buy when the market turns. Buying cash flowing rental property now is something that should also perform well in a recession. You have to be able to ride through the downturn and not need to sell it in the meantime however. Don't wait to buy that four plex because it really doesn't matter what price you bought the damn thing for as long as you don't ever plan to sell it. Buy a four plex that will pay for itself and then pay you income every month thereafter.

Exactly you can use hard money loan, to acqui

I think it is important to note that you need to make some money now before you get to the recession, or setup a business that is poised to do well in a recession. I personally own a real estate company active in WA, AZ, NV and GA and we work specifically with bank owned properties and servicing these properties for the banks and getting them sold when they are foreclosed on. I had to expand to 3 more states to keep the business going well during this real estate boom, but when the house of cards falls, I will be exceptionally well positioned just as soon as the government decides to stop propping the market up with artificially low interest rates and pumping free money into circulation through the FED.

The real question is will you be able to keep your current income when this recession hits?

What if you can't get a loan to buy any property?

I agree that a recession is on the horizon at some point but the best way to be ready for a big recession is not to wait but rather to keep stacking all your chips everyday in anticipation of being able to buy when the market turns. Buying cash flowing rental property now is something that should also perform well in a recession. You have to be able to ride through the downturn and not need to sell it in the meantime however. Don't wait to buy that four plex because it really doesn't matter what price you bought the damn thing for as long as you don't ever plan to sell it. Buy a four plex that will pay for itself and then pay you income every month thereafter.

@Rickchise23 In real estate you can, lets talk I am in Arizona

 

[21elnegocio]

Amen. The next recession could be next week. Or it could be in the next decade. Prepping for it should not be occupying a lot of your mental energy.

Get your house in order. Try to operate debt-free, and have free cash.

Thank you for your words @MJ DeMarco I am currently debt free, place I live at is free and clear. My truck is free and clear, I do have a few loans on a few homes. A couple that I am flipping and a few triplex that I am renting out, they pay for themselves. My main focus right now is to try to stack up as much as I can so that when recession hits buy up things that will multiply my income, it will be real estate of coarse but I am trying to see what else will be worth looking into.

 

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[21elnegocio]

bingo, I work for a holdings company and they literally bought 6 facilities during this time. When times get bad the valuation looks good for sellers.

Are you guys talking about a whole storage business ?

 

[21elnegocio]

This.
Almost everything is on sale during a recession. Having capital that you can redeploy to acquire them is the most important.

Don't depend on lines of credit or refinancing existing assets - these may dry up during a recession as banks become more strict on lending requirements. On the other hand, current owners of businesses and real estate may become more open to the idea of owner-financing, which would allow you to acquire and then refinance once the economy improves to pay off the owner. This actually takes almost all risk off of "you" the buyer.

Exactly, this is what one must do in a recession

 

[21elnegocio]

Real Estate.



Liquor store with check cashing and lotto.



Lotto tickets, booze, handguns.

Sex, drugs, and alcohol right ? unfortunately only one thing is legal, lets stick to the legal one.

 

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[OldFaithful]

A recession is a great time to expand, but only if you're prepared for it...

1) Capital goods are marketed down: I've seen some fantastic deals for all kinds of equipment during the previous recession!

2) More employees are back in the marketplace for hire: I watched & listened as my previous employer scoured the newly unemployed searching for new talent at a bargain price.

3) Opportunities abound when mismanaged businesses have to pay the piper: You can buy a business or stock in a larger business at much better rates, obviously.

PS. Never buy gold or silver during the recession. Sell it!

 

[21elnegocio]

A recession is a great time to expand, but only if you're prepared for it...

1) Capital goods are marketed down: I've seen some fantastic deals for all kinds of equipment during the previous recession!

2) More employees are back in the marketplace for hire: I watched & listened as my previous employer scoured the newly unemployed searching for new talent at a bargain price.

3) Opportunities abound when mismanaged businesses have to pay the piper: You can buy a business or stock in a larger business at much better rates, obviously.

PS. Never buy gold or silver during the recession. Sell it!

Thanks for your response @OldFaithful

 

[mike24601]

Isn't hindsight a bitch? Truthfully I'd go into R.E. and stocks, for the simple fact that when the market is bottomed out your stock can only go two ways: 1. Out of business or 2. Back up. The level of risk you want to take is up to you. I'm in the airline business, so I got in my time machine back to 2008 and chose one of the American "Big-3" carriers, which was trading at around $3 a share. Had I invested $10,000 into this stock, I would today have around $250,000. Had I invested $1,000, I'd have about $25,000 today. Not a bad return. Definitely fulfills the Unlimited Upside/Limited Downside sniff test. Just pick a company that has reasonable chances for stability and a return when the market rebounded, and put some money there. The only issue with R.E. as many have pointed out is getting credit during a recession. In 2009 people could hardly get $1500 credit limits on new Visa cards, let alone a mortgage. If you're not prepared to pay cash and fend off the ravenous gangs of bulk investors, you might not be able to get in on the action.

 

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[Sanj Modha]

BTW - who said a recession is coming? I haven't read it anywhere.

 

[CareCPA]

BTW - who said a recession is coming? I haven't read it anywhere.

Isn't another recession always coming? Do you think the global economy will continue to grow without ever retracting? History says otherwise.

 

[BradD]

Recessions are a natural part of the economic cycle, inevitable...and unfortunately, can't be timed..

 

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[Sanj Modha]

Isn't another recession always coming? Do you think the global economy will continue to grow without ever retracting? History says otherwise.

Recessions come in cycles but it's not like you can plan for it unless you're that genius off The Big Short who predicted 2008. It could be 10 or 20 years.

 

[CareCPA]

Recessions come in cycles but it's not like you can plan for it unless you're that genius off The Big Short who predicted 2008. It could be 10 or 20 years.

Sure you can. That's what this entire thread is about. What would you do now to set yourself up for success when the next recession comes?

There have been some solid answers in here. My personal thought is to have businesses that are high cash flow, so that when the next recession comes you can redirect that cash to new ventures and purchasing the assets of others that have overleveraged, and now have to have a firesale.

If you don't believe that you can structure your business and life to be ready for the next recession, then how viable are you in the long run? This thread is an excellent exercise, if not for how you can grow in the next recession, at least for how you will act defensively. Like everything else in life, don't get caught off guard on something that you know will happen eventually.

 

[MidwestLandlord]

Cemeteries.

Actually, there's big fastlane opportunities in the business of death.

An old industry, and an aging population...

As for a recession, stuff just gets cheaper lol. If you have the cash, its hard to NOT make money during a recession. My best years were during the last recession.

I worry more about out of control inflation.

 

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[MJ DeMarco]

Isn't hindsight a bitch? Truthfully I'd go into R.E. and stocks, for the simple fact that when the market is bottomed out your stock can only go two ways: 1. Out of business or 2. Back up. The level of risk you want to take is up to you. I'm in the airline business, so I got in my time machine back to 2008 and chose one of the American "Big-3" carriers, which was trading at around $3 a share. Had I invested $10,000 into this stock, I would today have around $250,000. Had I invested $1,000, I'd have about $25,000 today. Not a bad return. Definitely fulfills the Unlimited Upside/Limited Downside sniff test. Just pick a company that has reasonable chances for stability and a return when the market rebounded, and put some money there. The only issue with R.E. as many have pointed out is getting credit during a recession. In 2009 people could hardly get $1500 credit limits on new Visa cards, let alone a mortgage. If you're not prepared to pay cash and fend off the ravenous gangs of bulk investors, you might not be able to get in on the action.

I posted this at the BOTTOM of the last recession...

The Misery Portfolio

I've gotta busy morning but if someone wants to calculate the portfolio value today, I'm betting its over $1M from $70K.

I created a "Misery Portfolio" with a $10,000 investment in each.

Citibank (8264 shares / $2.14 Basis)
Bank of America (2695 shares / $3.71 Basis)
Las Vegas Sands (4587 shares / $2.18 Basis)
AIG (22635 shares / $.4418 basis)
American Airlines (3236 shares / $3.09 Basis)
Ford (5319 shares / $1.88 basis)
GM (4673 shares / $2.14 basis)

March 3rd, 2009
Total Value: $70,000

 

[G-Man]

I posted this at the BOTTOM of the last recession...

The Misery Portfolio

I've gotta busy morning but if someone wants to calculate the portfolio value today, I'm betting its over $1M from $70K.

2.7 Million